Emma Vandore and Pamela Sampson, Associated Press Writers, On Tuesday June 1, 2010, 6:28 am EDT
PARIS (AP) -- World stocks fell Tuesday amid investor concern about the global economy as a report showed Chinese manufacturing slowed in May, and on continued fears about Europe's shaky government finances.
London's FTSE index was down over 110 points, or 2.13 percent, at 5077.86. The CAC 40 index of leading French shares was down more than 86 points, or 2.47 percent, at 3,420.99, while Germany's DAX dropped over 122 points, or 2.05 percent, to 5,841.87.
Shares in BP PLC plunged 13 percent to 429.2 pence ($6.20) on the London Stock Exchange. Because of a bank holiday, Tuesday was the first day of London trading after the oil company's failed attempt over the weekend to block the oil leak in the Gulf of Mexico.
BP said that costs for the spill have reached $990 million.
Wall Street appeared to be in store for further losses as surveys showing that growth in China's manufacturing had slowed underlined fears that Asian manufacturers and exporters remain vulnerable to waning of demand in Europe and elsewhere.
The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, fell to 53.9 in May from 55.7 in April and 55.1 in March due to lackluster demand both at home and abroad.
In Europe, investors continued to fret over whether austerity measures to address Europe's debt mountain will send the region back into recession.
Oil prices, meanwhile, hovered below $73 a barrel. The euro and the pound slid against the dollar.
Benchmark crude for July delivery was down 2.49 percent at $72.12 a barrel in electronic trading on the New York Mercantile Exchange.
The euro was down 1.45 percent at $1.21, and the British pound fell 0.5 percent to $1.44.
Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd. in Tokyo, said investors remained worried about the impact of Europe's debt crisis on the global economy.
"Investors are not convinced that the crisis will end soon. With growing uncertainty over the euro zone's crisis, investors are bracing for a further slump in the euro against the dollar," Sato said.
Political uncertainty was also a negative in Tokyo, where Prime Minister Yukio Hatoyama faced mounting calls for his resignation after a small party left his coalition government in protest at the reversal of a campaign promise to move a U.S. military base off the southern island of Okinawa.
Earlier in Asia, Japan's Nikkei 225 stock average fell 56.87 points, or 0.6 percent, to close at 9,711.83 and Australia's S&P/ASX 200 dropped 0.4 percent to 4,413.1.
In Seoul, the Kospi lost 0.7 percent to 1,630.40, Taiwan's benchmark shed 1.2 percent to 7,289.33 and Hong Kong's Hang Seng retreated 1.4 percent to 19,496.95.
The signs of slowing in the manufacturing sector helped drag China shares lower, with the benchmark Shanghai Composite Index falling 0.9 percent to 2,568.28.
Sampson reported from Bangkok. Associated Press writers Shino Yuasa in Tokyo, Alex Kennedy in Singapore and AP Business Writer Elaine Kurtenbach in Shanghai contributed to this report.
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